Choosing the Right Bank and Overcoming Inflation

The Small business show episode 352 for Wednesday, November 3, 2021. Greetings folks and welcome to the Small Business show here at BusinessShow Co where we are small businessing every single week. So sponsors for this episode include shopify.com SBS we, we know about this, right? You get your 14 day trial and full access to test it all out. And a new sponsor, the David vs Goliath podcast dedicated to helping small businesses compete against their large competitors. So we will talk more about both of those same. Yeah, I know, yeah. Yep. Yeah, we'll talk more about those in, in a little bit. But for now. Yeah. Here in Durham, New Hampshire as usual, I'm Dave Hamilton.

And in Lafayette, California, I'm Shannon Jean. Yeah, man, I'm looking forward to learning more about that. Both those sponsors. Yeah, Shopify and I love taking on the big guys, so that's great.

I think so. I think so.

Good stuff. Thinking of big guys, we were going to talk about some banking before we roll into our meteor topic.

Yeah. And our meteor topic today is I, I think it'll be meteor. I don't, you know, we haven't done the banking one yet so.

Yeah, that's true. You don't know.

You don't know.

Listeners decide.

That's right, you get to decide. Yeah, but the meatier topic is inflation and dealing with that too. Right. But yeah, banking. So we had a question about how should I go about choosing a bank for my small business or what bank should I choose for my small business? And I have a lot of feelings on this and I don't know that any of them are concrete. In fact, I think most of my feelings are conflicting on this.

Mine are all anecdotal based on my.

Experiences and so same, same. I mean I worked for a bank for a long time. I didn't work in the branch but I worked for Citibank for a while. So I definitely know what it was like 20 plus years ago working behind the scenes at a very, very large bank. And it's like any other very, very large company. There's lots of red tape and things move slowly and all of that. But they do have great resources at their disposal and they can do things. And in the branches the, the managers and the tellers really are equipped, at least back then were and still are equipped to, to give you personalized experience or personalized help and all that stuff. So I'm not necessarily against using a big bank for your small business. Although when I was going to the score, coaching and everything and they saw that I was with bank of America, which is where I've had accounts for several of our businesses for a while now, for many, many years. They like. One of the first things they said was get away from the big banks. Get yourself find a, not a, not a single branch bank, but find a local bank, you know, that has some, has a track record, you know, five plus years in business, that sort of thing. Right. You know, and you'll get better service from them. You'll get more personalized attention from them, which as a small business owner can be important. You need to be able to get the attention of your bank and banker so that when you need, when you're in that weird scenario where the, the numbers and the procedures say no, they can say yes. Right. They can take a look at it on a more human scale.

Yeah, sure.

But I've had that with the big banks too. So I didn't move, to be perfectly honest with those businesses. So, you know. Yeah.

My take on it is. Couple different things. You're right. This big, massive banks are. I'm not a huge fan of banks anyway. And the problem with bankers is often right when you get somebody set and you've taught them all about your business and everything, they get transferred, they leave a job, they leave. And so always remember with bigger banks or even smaller banks, there's a relationship person that recruits you and kind of talks and schmoozes you, takes you lunch, concerts, golf, whatever. And then there's this kind of hidden committee in the background that now this person is supposed to be your champion, your relationship person. But ultimately they may not be the decision maker.

Right.

So that, that's a great reason for smaller banks. I, I bank with B of A as well, however, the only reason. And I get great service. But, but it's not just because of my business relationship. It's because I have all my personal investments with Merrill. Used to be Merrill lynch. They just call it Merrill now. So when you, you know, you get a little different attention. If I have a problem with B of A, I don't call B of A. I don't call an 800 number. I call my, my financial, you know, reps office and they have a relationship liaison there and they get things done quickly. But for many, many, many years, I didn't have anything like that. So I did just that. You know, smaller banks I loved once more online banking became available. Yeah, banks like. Didn't we just have a sponsor? Nova Nova.

Yeah, we had Novo recently and Ally.

Bank is great synchrony bank is great. You know, synchrony is, is the old gmac, I believe.

Oh, I didn't know. Oh, that makes perfect sense. Oh, sure, yeah. Okay.

And Ally is another one of those big, you know, finance vehicles that went out on their own. Those banks are terrific. And I have, I still have accounts with both of those because they offer all kinds of other flexibility and if you're savvy about online stuff, it can really benefit from you. But you're not going to have that one to one relationship manager. But for certain things, you don't need it. So I don't know if that is helpful or not. I do love having a local bank be your kind of everyday small business banker. I think that's really good.

Yeah, I mean, I got the, you know, when it was explained to me that way by the score folks, it was like, okay, I get what you're saying. I get why you're saying it. You know, you might, you might have a better chance of, like you said, getting to know sort of everyone at the bank and not just the one person with the.

It can help.

Yep, it can help. Yeah. I think honestly, to me, the most important thing when starting a new business, especially when you don't know if it's going to, you know, succeed or fail, because let's face it, they often do the latter, not the former, is to find a bank that charges no monthly fees for your checking account. Like that. That's a great place to start with a bank. Or if it's just a side hustle, even if it's like for what we do here these days, this business you and I have is effectively a side hustle for you and me, right? I mean, I would never have called it that because everything I have is a side hustle. But I mean, it is, right? It's not the primary thing that you or I do. And so when we closed our bank account for a while with this, and we've used this particular entity for over a decade for different things. We had our deals on the website and we had other stuff, but we closed our bank account. And then when we sort of kicked up the podcast and was like, well, we got to do something with this cash that know we're getting from our sponsors and things like that. Like, where are we going to put that? PayPal's not going to cut it because PayPal's a great thing, but it's not a bank in the way that you need a bank sometimes. And so it was like, we need a bank. Like, all right, well, let Me look around and find one that has no fees. And so I did. And we've been using Citizens for this business and it's been fine. You know, I know the people there, they have changed three times since we opened this account. I opened another one for another business basically at the same time. And, and you know, and they, and, and that business runs a ton of money through it and it, you know, they still are change it, you know, they change our primary contact all the time, but they've been fine, you know, but you need to remember, like, you will get what you pay for. So an account that has no fees, no monthly fees, might not quite have all the services that you want. Like with this other business now, it's grown. We do a lot of wire transfers and things like that just to, that's.

Part of kind of our different requirements flow.

It's a different requirement and it's been like, oh man, maybe we should move to a different bank. Like getting online access to do wire transfers at Citizens was required Herculean efforts.

It was like, this is crazy.

Like you want me to drive 10 minutes every time I want to do a wire transfer? There's no freaking way. And they're like, well, we do have this other program, sir. And it's like, okay, well Now I'm spending 150 bucks a month. You know, like, okay, cool, that's.

Yeah, no, I agree. And I guess I want banks to find the bank that gives you the most but also stays out of your hair the most. You know, the least amount of requirements environments I think is important. And I also think it's important that you have long term discussions just about this kind of stuff you're talking about, oh, we're going to eventually need to do lots of wire transfers or hey.

We didn't know that out of the gate with this other business. It just, you know, it's like things evolve. We started doing one thing, we pivoted to doing another and it was like, oh, okay, this is now our needs are different. And so yeah, don't be afraid to change banks either and let that evolve with you. Like, like this free checking was a great thing to get started. And then it turns out that that costs us way more than it would at another bank that doesn't have free checking.

Yeah, that's right. And I would say instead of just walking into the bank or going online and opening an accounts, if you really want this connection in a local business banker call or go by and ask to speak to their business development department, have someone pitch why you should bank with them, the relationship on its head. Remember you're the customer. You're not trying to impress the bank, the bank should be trying to impress you. Always remember that sometimes it may seem like the opposite when they're requiring you to give more paperwork and you know, subjugate your, your investment to loans you have and all this can personally guarantee. But always remember to keep that relationship. I'm the customer, you're supposed to do what I need.

I like that. That is a, it is good to remind yourself of that regularly because they will require you. You know, there's all this KYC stuff that know your customer requirements and the bank has to ask some very like probing questions about you and anyone else who has a, a controlling interest in your business. Really not, not just controlling. Anybody that owns 25% or more I think of, of the business has to go through this KYC stuff meaning they need your tax ID number and it's the anti terrorism, anti money laundering stuff that's now in place that regulation wise the banks don't have any choice about this and they're going to ask to see your, you know, articles of organization and your, you know, agreements that you have in the company. They're going to want to see all this stuff in the past that wasn't the case. I mean I've got, I have accounts open like our account that we have for Backbeat Media. I don't know that they have anything on file for us to be perfectly honest.

Yeah, times have changed.

Yeah, times have changed. That's the thing. That account was open 20 years ago. Yeah, exactly.

And I think that you always also remember that everything is a negotiation. I recall one of our business bankers telling me, look, the bank wants a 2% relationship with you, meaning we want to make 2% off of everything you do. So keep that in mind when they're offering you lines of credit. When you're talking about maybe bringing more business to them, when you're referring things. Everything is open to negotiation and you should have that back and forth. They do want to know a lot of information but it is important if you have a good relationship with your business banker is to keep them posted how things are going. Especially things are doing good in your business. That's the time to set up lines of credit.

Yes.

To take out term loans if you need things. Don't go to them when you need the money because then that relationship where they strangely start treating it like you know, you're having to prove yourself to them that don't do that, don't do that. Avoid it. No.

And, you know, I would say when you're in that spot where even if you know you're not dealing with it, I am. Where, you know, you need wire transfers and your bank makes that difficult or there's a friction point with it or whatever. When you get to that point where you are opening, you know, opening those lines of credit, when you have a little bit of financial strength to your business and it doesn't, it's. You don't have to be moving hundreds or even tens of thousands of dollars through just something consistent where you feel comfortable about your business. I would say at that point is a great time to open an account with a second bank. Oh, yeah, that's good, right? And, and make sure that you can do all of the things that you need to do with your bank with this second one. Right. And if you can make it so that you're not paying fees, okay, great. And maybe that requires a minimum balance. You just, you know, put some of your, your sort of war chest cash over there or something like that or, you know, get it all set. All of the things that you have online, like your PayPal account, if you use that for your business or other accounts that you use, set up ahead of time with ways to transfer funds to both of your bank accounts. Now. Right. The old one you probably already have, that could still be your main one. But when you set up this new one, go and sort of integrate it with everything so that if something happens and that first account is one you decide to close, or for some reason the bank decides to close it, you have this second one ready to roll, you're good to go, everything's in place, everything's good. And you stayed in touch with your banker. There's. So that there's no great surprise that gives you a whole lot more leverage when you are talking to your bank, either one of them. Right. Because now it's like, oh, you don't want to give me this? No, it's no problem. I'm going to call plan B. You were plan A, and that's why I called you first. But this is obviously not something that works for you. No problem. I'll go to plan B. That's a great way to negotiate, I think.

Yeah. Well, again, it comes back to you want to be negotiating from a position of strength, and if they're not the only resource for you, and they shouldn't be, it's good for them to know that as well.

That's it.

They need to Earn your business.

Don't forget that all the time. Yeah.

Even though you're maybe small and maybe you're struggling or whatever it is, that's not going to, it's not going to be that way forever. And, you know, they can earn your business all different kinds of ways. You know, if you're going to buy a house or refinance your house, maybe, you know, maybe they can offer you a mortgage and you can get a discount on your mortgage because of your banking relationship. You know, there's all kinds of ways to maximize that stuff.

I did that last year was. I mean, we didn't wind up refinancing for. For different reasons, but we had one bank that was giving us the runaround. And finally I called my corporate contact at bank of America and was like, hey, if we wind up moving this to you, can you make it happen? They're like, absolutely. Like, there was no question. It's like, right, Yeah, I should have done this in the first place. He's like, yeah, that's fine. It's like, when you're ready, you give me a call. We're good.

So, yeah, it's good stuff, man. So, yeah, I mean, if you have banking tips you'd like us to talk about Feedbackus show co, let us know you think.

Absolutely, yeah.

Hey, before we talk next topic, we have a new sponsors page up too at businessshow Co sponsors that you should go take a look at. See all the cool people that have sponsored us. And we really do have an A to Z from Amazon to Zapier, which I thought was cool.

That is pretty cool. Yeah, I like that. Yeah, yeah, they're all, they're all up.

There and the logos are there and you can click in. And a lot of the offers that, you know, I thought may had expired are still active, I noticed on a bunch of discounts.

And yeah, just because they're not active sponsors of ours doesn't mean that their offers are not active for you to take advantage of. Yeah, so go ahead.

We.

We made all the URLs clickable so that you can take advantage of the, you know, the special deals and all that good stuff.

And we really thank all the sponsors for keeping us through the 352nd episode.

That's right. Cool. Yeah. Hey, speaking of sponsors, I would love to talk about our two sponsors for this episode now.

Let's do it.

All right. Hey, look, you know, almost every small business faces competition from much larger companies in their industry, right? That's true for all of us. In order to compete against them and win. We small business owners and entrepreneurs need to arm ourselves with the right tools and resources. And that's why we are loving this and recommending you start listening to the David versus Goliath Podcast. In each episode, host Adam Degrade covers the five smooth stones that every business needs to slay Goliath in their industry. We were just talking about podcasts for small businesses and now we've got another one. Here we are because the David vs Goliath podcast is dedicated to helping small businesses leverage technology to compete and win against large competitors. And it's so clear that Adam has this passion for inspiring, educating and activating small business owners. With episodes covering emerging industry trends, top strategies and digital marketing, constructive management techniques, and more, this show is packed with everything you need to succeed. With guest interviews, sales, role playing and actionable tips that you can apply directly to your business. Today, we're telling you, if you're a small business owner or entrepreneur and you must be if you're listening here, the David vs Goliath podcast is a must listen. So go search for David vs Goliath podcast on YouTube, Spotify or wherever you listen to your podcasts. And our thanks to David vs Goliath for sponsoring this episode. You know what that sound is? We love that sound. It's the sound of another sale on Shopify, the all in one commerce platform to start, run and grow your business. Because Shopify is designed for anyone to sell anywhere. Giving entrepreneurs like you and me the resources once reserved for those big businesses customized for our needs. With a great looking online store that brings ideas to life and and gives us all the tools to manage our day to day and drive sales. Making your idea real opens up endless possibilities. We all know that it's a journey, but that's the beauty of entrepreneurship. Look, we've used Shopify here. It is so much easier to let the experts in one thing do the thing they're good at so that you can do the thing you're good at. And unless your business is making shopping carts and e commerce engines, you don't want to have to do that for yourself. You want to use Shopify. That's how we started using it and that's why it works. Shopify powers over 1.7 million entrepreneurs from first sale to full scale. Every 28 seconds a small business owner makes their first sale on Shopify. So to get started go to shopify.comsbs all lowercase for a free 14 day trial and get full access to Shopify's entire suite of business features start selling on Shopify today. Go to shopify.com SBS right now. Shopify.com SBS and our thanks to Shopify for sponsoring this episode. All right, so inflation, Shannon.

Oh, yeah. Yes. Let's talk about inflation.

Let's do it.

Yeah. Prices are up, right, all over at 5.4% inflation last quarter, the highest in over 13 years. Right. So we did a show last week on supply chain and how that would be impacting your business. And I also want to talk about inflation and some tactics to offset how that is probably squeezing your bottom line a bit. Sound good?

Interesting. Yeah, yeah. I mean, I'm, I'm, I have a lot to learn here. Well, I mean, I, I'm aware of inflation, but. And I, but I don't really think about it when I'm making plans for my business and probably missing out there.

Well, I mean, now, you know, everything, you know, shipping prices are up, packaging costs are up, inventory costs are up, fuel prices up, you know, all kinds of stuff. And your customers are being impacted from everything when they go to the grocery store to, you know, buying clothes, I mean, groceries, I think were up even more than 5.4%, something like 7%. So it's, it, it's important to be aware of it. And so talking about how to manage these, you know, inflation issues, the first thing, and we talked about this a bit with supply chain, but the quality of your data for your business is even more important now. Not just the sales and revenue, but your true cost of goods. Like if you're shipping, you know, items from overseas. Right. Shipping container costs have gone up from like $1,800 per container to almost $8,000 per container. Yeah, yeah. It's insane. So, you know, tracking that to be sure that those expenses are true and, you know, real. Hitting your, hitting your books so you can see how the impact is your labor costs.

Right.

Trying to get people to come back to work might have increased a bit. And I would say don't wait till the end of the month. I mean, if you're in the middle of it and looking at how inflation's happening and you're trying to track everything, you really need to, to do a weekly dive into at least whatever data you've captured briefly, and then at the end of the month, you can dig into it deeper. But you want to keep abreast of what's, what's happening and what expenses are you seeing increase. So you can take some of the other steps that I'm going to talk about next.

Okay. That Makes sense. Yeah, no, makes sense.

A lot of similarities in the supply chain thing. One of the most important things with inflation and your, your cost structure and pricing is to communicate with your customers. Be very transparent. Everybody knows what's going on. Everybody sees it in the news. You can, you know, talk about it in your newsletter about things you're doing to try to keep your pricing stable. You know, how things are impacting, asking for input from your customers. Just having it as part of your normal dialogue because you may have to at some point raise your prices. And you know, if you are easing people into this, it's going to be a little bit easier. You know, we try to avoid having to raise prices, but at some point you may have to.

So how often this is interesting to me. So obviously your. When you're dealing B2C, right, like, right where so you, you know, you're selling directly to the consumer, it makes a lot of sense to have regular communication with those people, right? Because they need to remember to come back and buy from you. And you almost have to. You are forced to do that in some automated or semi automated way. You need some kind of megaphone because chances are you don't have, you have more customers than you could personally reach out to on a regular basis. Right, right, right. So you need hopefully. Right, right, exactly. So you need to go and do this with a mailing list or some other way that, that you've put into place to, to, to reach your customers and, and in including inflation as one of the topics that you talk about there, especially, especially preemptively, very, very smart. What are your thoughts on how to do this if you are a B2B company? Right. Like, like, do you, would you do a mailing list for, you know, for your customers in that regard? Yeah. Okay.

I think so. And I think those people are even more aware of it, right. Because it's happening in their own business as well. So, you know, you can either offer advice, right. Add value, even just linking to articles that talk about how to manage inflation pressures in your business. You know, that could be it. You could be just subcon. You know, it's a good persuasion technique to be educating your B2B customers, your business customers about things like this.

Right.

Talking about it and saying, hey, we're all grappling with this. Here's a great article from the, whoever, the Harvard Business Review, about ways to help offset inflation costs and ways to manage it. So, you know, you're getting it front of mind and you're prepping to, you know, if you have to take some actions that they're going to be like, oh, yeah, we're aware of this too. We know how it is. You know, we're going to have to do, you know, make these adjustments as well.

Right, yeah, no, that makes sense. That makes sense. Yeah.

And you know, the thing I, we always talk about here, not getting caught in that price trap, right? This race to the bottom, lowest price, that's just a bad business to be in or bad business model, unless you're just massive. So I come back and think about differentiation. How are you different than these other people that, you know, if you raise your price on whatever a product or a service, is it really going to impact where a customer is just going to walk away like that? Well, you know, you got to talk to. And again, it's about educating your customers, talking about your reliability, your warranty, whatever it is. But, you know, why are we different and why do we deserve your loyalty? Right? It's conditioning over time and customers going, yeah, these guys are great. They stood behind this or they came out and fixed this at, you know, the middle of the night. Didn't you know, they showed up when they said they were going to show up. Those are all things that if you talk about them in your regular communication with your customers, it intrinsically builds value. So when they go, oh yeah, I understand they had to raise your price a little bit because everything's gotten more expensive.

Right?

It's much better than just dropping it on the, oh, everything's going up when. Or getting the bill and having it, you know, just randomly show up. Communication.

You don't, you don't think people like it when you treat them like, like the phone companies or the cable companies do, where you have the price and then there's this random positive number that's added to the total that they assign to some, you know, fee or, or surcharge or something. That, that's not right. We don't want that.

No, that's your small business superpower. You can, you can get yourself way beyond that. That's why everybody hates the phone company and the big cable companies and this kind of thing. You know, uh, it's you, it's an opportunity actually to connect with your customers on an entirely different level.

Oh, I agree. I love thinking about that as your small business superpower because it really is, right? The fact that, that you are a human and you are treating other people like humans, that is a small business superpower.

And you can tell them, oh, you have questions, give me a call. Or talk to one or, you know, whatever. Give us a call. We'll talk to you about it. Tell you what's going on.

We'll talk to you. Yeah.

It's not a secret. And I've often been in the position where I've been, well, no, I don't want to bring that up, but I found that. That being transparent even when things aren't going so great, is really rewarding in the long run because we're human. And if, you know, you can flip this conversation on its head and use it as a way again to. To help your business when things turn around. Right. When inflation starts to go back down.

Absolutely.

You can earn some more customers. I'm not a big fan. Like, we're talking about this, you know, separate fees and all this kind of stuff.

I knew you were.

I can't stand it. We have it out here now. A couple things that happen out here, like, every restaurant you go to out here in the Bay Area, most of them add some kind of lifestyle fee now. And, you know, I would just rather pay more instead of pointing it out to me that, you know, or what do they call it? Living wage fee? Because it makes me feel like, well, you should just pay them more. Charge me more for the food, you know, charge me five bucks more or whatever it is. But I get it. This is their thing. The other thing I've noticed out here is when you get the little credit card machine, when they bring it to you, the default, the choices for the tip are 25, 30, and 35%. And maybe it's just I have that old man disease that I talked about last week. Like, what happened to 20%? You know, and so you have to click other and physically change it to calculate it to make the 20. I was like, wow, that's good Persuasion, I guess. But, you know, it's great.

Persuasion. Yeah, yeah, yeah, yeah. That's interesting.

Yeah.

I don't know how I would. I have gotten. Especially since, you know, the lockdown began and we started, you know, using a lot of, like, takeout and things like that. And I, as someone who has a. I talked about my side hustle earlier, being this show. I have a side hustle to the side hustle, which is my music business. Right. Which shut down. Right. Like, I wasn't playing any gigs. And I, you know, even when I am playing gigs, I'm very aware of how difficult it is for someone in the service business and certainly the entertainment business to just make ends meet, just in general. Right. Like, it's. It's a normal thing. So I, I definitely, I have friends obviously that I work with in, in that environment. And so I'm very sensitive to that. And as soon as lockdown began, it was like, okay, well we're going to start tipping more because a, we're, you know, not spending our money anywhere else. So I, I, this is all a preface to, I generally do tip these days, you know, in that 30 to 35% range. But I don't know how I'd feel about it if that was presented to me as the expectation.

The default.

Yeah, like, I like seeing the default as like, oh, I'm going to do 30.

Killed it.

That's right.

I'm going to.

Yeah, yeah, yeah. Now is that, is that a way to get people like me to, to want to do 50?

Maybe.

When I was, when I was at Talk about Persuasion, when we were in Nashville, we went to this club called the Bluebird, which is somewhat infamous in, in music circles and in Nashville circles. It's where a lot of song, it's a songwriter's performance. It's, I mean it's, they, it's called, I called it a club, but it's really a cafe and it holds like 70 people. It's tiny. Right, but this is where Taylor Swift got her start, Garth Brooks and got to start there. Like it's, it's legendary for a lot of good reasons. And we went to Songwriters Night there and there was a host of Songwriters Night who yes, was, is a songwriter but also is a stand up comedian. And so he was our host. He led us through, I think it was five or six different people who came up and did like three songs each. And it, and they have food and, and drink there so you could eat dinner or get snacks and then of course, you know, you can get drinks. And I think there was a, I don't know, a $10 minimum per person or something like that. So, you know, tickets were free. Fine, no problem. So everybody had a bill at the end of the night, right? This is how this works. When there's a $10 minimum, you know, you, you have a bill. And he said, you know where they had just reopened, this was the beginning of August. They had opened at some point in July. This is this year 2021. So they had basically been shut down for an entire year, right? Yeah, well, this place is tiny. You couldn't be in there socially distanced, like that was impossible. And so they finally had reopened and they were only open for limited nights. They certainly weren't open seven Nights a week. I think they were only open three nights a week. We felt very fortunate to be able to go and experience this, you know, this place. And we had a great time. But this comedian, in a very friendly, disarming, jovial way, said, you know, well, but. But the way he said it was, yes, of course it was. Open your wallet. The way he said it was, you know, and it's okay to tip 100%, right. You know, and he's. He's like, if you've never done that before, the feeling is amazing. And I highly recommend it. So if you've never done it before, here's your opportunity, you know, and he even later in the evening referenced back to it. He's like, you know, this isn't the first night I've said that. I said that the other night. And the waitstaff came up to me at the end and they said, you know what? A couple of people did tip 100%. We've never seen that before. I mean, it was brilliant. Persuasion. It was all I could do to not tip 100%. Yeah, that's cool.

That's great.

Because, you know, he really set it up as the. This thing like, here's a great idea. And it was. Oh, yeah, that's funny, right? So disarming. We're laughing about the idea, then he's telling us a little more about the idea. Then later he's telling us other people have already done this, right. So you could. You could match them and the implication was. Or you could beat them. The choice is yours. That's right.

That's good.

Yeah, it was fat. It was really, really. It was. I loved the way he walked us through it. It was like, man, this is brilliant.

I love it. Yeah. If you're in the service business, that's. That's fantastic. Yeah, I think that's a great idea. And, you know, along the flip side, if you're selling products, you know, we're kind of a discount or promotional driven society. You know, you go to the website here, sign up for this and get 10% off. And, you know, maybe you need to adjust that back down a bit. You know, one of the folks that we've had on this show, you know, Corey Foskett from Tangle Free, that was one of our early interviews a few years ago, and we've had him on as a. Or he came back again. We've played it as a best of. They typically do a 40% off sale right before this big season of their product line. And so this year, I was Talking to him, he's like, yeah, we're just going to do 30%. Right. Still significant. But we're, you know, we're just kind of holding back a bit because all of our costs have gone up, you know, so think about ways to do that.

All of these things are inflation, I love, but, but not in the way that we think of inflation. That's what I love about this. Yeah, yeah.

And then, you know, we've all seen the product sizes get smaller. I'm not a big fan of that. You know, leaving the price the same but selling a little different. But perhaps you can get creative on how you bundle things together. Right. Can you do different combinations of your product or of your service? You know, can you get creative about the way, hey, if you're going out to work at somebody's facility, can you combine some services and to try to generate more revenue from that same trip, can you combine your products to try to get more revenue from that same order? It's, it's definitely time to get creative on how you, how you combine your products and services. I like. It's a good way to do it.

Yeah. Right, right.

And then one thing I always talk about too, to people is don't get stuck in the free shipping trap. You know, Amazon has, you know, convinced the world that everything should ship free, but it's really not free.

Right.

Because you're paying 120 bucks a year or whatever it is now for prime, which is fine, I think it's a good value. But as small business owners, people don't have, I mean, you just have to train your customers that that is not the normal expectation and, you know, educate your customers about the true cost of your shipments to them. Because people don't know. They just don't know that, especially now in October, November, December, that all of the shipping carriers have added holiday surcharges to their shipments. So like, for my business, one of my businesses that we ship product typically would be like a $14 shipment for a two pound item. And now it's up to 16 to 19 depending upon where you are in the United States. So talk to your people about that stuff. Talk to your customers Smart. They will understand. We did a show recently about finding your primary customer. Now more than ever, it's important to know who is the most profitable customer, what demographic is really the best for your business, and to perhaps let some of those other ones go that are more price sensitive. Right. And maybe if you come out the other side of this thing, your business will be even stronger. Because you understand that, wow, you know, we were chasing this, trying to get this business and turned out it really wasn't the most important part of the most profitable. So you know, who is generating the most revenue for you? The most profit, not just revenue. Think about that.

Right, right. Yeah, yeah. Makes sense. Yeah. If you've got eight. Well, certainly if you've got a difficult customer that is requiring an inordinate amount of your time, they may not actually be as profitable as you think they are. But the same holds true for a, an entire product line or segment of your business. It might bring in lots of cash, but take a look at what are we actually earning from this and if it's not very much and you can't see another reason to keep it going, I mean, there's sometimes, well, it doesn't earn us much, but it pays for itself. And look at the advertising it gets for us. Right. Or maybe even it's a loss leader in some way. Yeah. What's the actual value? And if you can't answer that question, jettison it, man.

Yeah, yeah, absolutely. I talked about this a little bit. I don't believe you should be selling if you can avoid it. A single product with no add on or a single service with no add on and, you know, more warranties, more services. Hey, I'm out at your house repairing this. I can, we can do this while we're here. At this discounted price. I mean, just incremental revenue can really help you during these times when things are getting more expensive. Subscriptions, you know, think about it. What could you sell on a monthly basis that people would be willing to pay for, for whatever it is you do? Think about it, get creative. Adding things to your regular sales, really, really important. I can, from being in the, towards the end of my technology career in the phone business, which was a horrible business, phone repair business. It was good for a while, good for a while. Good in the beginning, but it just became a commodity and everybody began doing it, as happens with most things. And it turned out, you know, by adding things to that repair, one of which was a screen protector, that became the most profitable part of that transaction because the pricing kept hammered down from competition and everything else. But we made exponentially more profit margin on the screen protector and the installation of it than we did for the repair.

That's brilliant.

Just got to think about it.

Yeah, that's right. Well, yeah, before you jettison that, that product line or, you know, segment of your business, look at what, what could you add to it, man.

Right.

Yeah, I love all these creative ways of, of looking at inflation. I would never have thought, thought of these as solutions to inflation. But you're also create, I mean, the way to solve inflation is to inflate your own revenues. Right?

I mean like, get more efficient.

Right. And get more efficient on the back end. On the back end, yeah. And so, yeah, I love this. Yeah, it's great. It's great.

And then, you know, increased labor costs. Right? It's. Everything is more expensive getting people, especially if you have entry level positions, I think very difficult right now. But some of the things you can do instead of just paying more all the time is think about other ways to either attract or retain those employees and maybe even increase revenue. Flexibility is a huge, huge bonus and a benefit if you've got, you know, entry level or just employees that have families, have kids that need to be able to take off and do whatever that flex time is. I mean, I, we really leaned into that over the years at our companies and I just heard over and over again, it's like, oh, I, I'm here because when my kid has soccer or my daughter's in a music recital or somebody gets sick, I can take off and go get them and I don't get penalized for that.

That's right. Yeah.

And it's huge.

No, we, we, we've always embraced that here. Of course, at the, at the foundation of it, we've had remote work, right. That's how our companies have always been. As soon as lockdown hit, and certainly six to 12 months after that, many companies were still in remote work. And a lot of them had said, we will never go back to the office. And so I thought that we had lost that differentiator for us. But it turns out not quite as much because at least not at the moment. So many, even those companies that are choosing to keep all their workers remote are not really set up in the same way to do it because we've been doing it for decades. Right. It's part of our culture. It's, it's, it's awkward for that culture. It's still like, okay, well, you got to work at these hours and do this and this. It's like, you know, there's other ways that. And to your point, flexibility is the key. And that's what we constantly. And don't just sell this to new people you're hiring, by the way, sell it to the people that currently work for you, whatever your flexibility is, you know, loud and proud. Shout it from the rooftops as often as you can, because see it.

Yeah.

They pick up on, they see it, but they also, they know what else is out there. They know that it is, you know, a seller's market in terms of employment right now. You know, the, the leverage is not with the employers at the moment. Correct. And so you want to do everything you can to retain the people that you've already trained to work at your company. Unless they're bad people, then obviously just get rid of them. Fine.

Yeah.

But you know, yeah, and speaking of.

Training, that's another benefit to offer training. Career development. Talking about a career, career path with them can keep in increased loyalty of your existing people and as well as hiring new hires. Like look, we're going to help you, we're going to pay you get these certifications or whatever. You can certainly have conditions upon those. Like look, if we get you certified for X, we'd like you to stay for 12 months or whatever. You know, these kinds of trade offs. But people like that, they want to know, okay, you know, hey, I'm going to work here for a couple years or whatever it is. I'm going to get some training and maybe I'll go on someplace, maybe I won't, you know, maybe they'll do it from within your own organization. And lastly, this sounds very basic but if you have people on site and as people are returning to work and things food, let me say that again. Food. Feeding people is one of the most powerful ways to create loyalty for your team. Your employees, your suppliers, your customers. They associate that good feeling food. And you know, we, we always had a good budget for lunches, breakfast barbecues, you know, these kinds of things. And it really paid off because people gather around food, they make connections around food. They like it, they, you know, it's just, I can't, I can't state the power of how powerful it is.

Interesting.

Don't forget, don't forget food.

Yeah, no food that makes. That's, yeah, that's good.

And maybe remote, you have to do other things. Maybe you have to send everybody, everybody lunch and do a zoom where we're all going to have lunch together. I, I don't know, be, be creative. But yeah, we connecting over food.

We need to get better about that here. We've done it a few different ways but you can send an UberEats card and that way, you know, people can have food delivered to their house and, and you can get your lunch together or do your, you know, your, your jackbox games online with each other, whatever it is. Like there's Lots of ways of, of doing this. Yeah, for sure.

The better connected you are to your people, the less chance they're going to leave for just a little bit better offer.

Yep.

And the more chance they will help recruit other people to come work for you.

It's true.

It's very important.

Yeah.

Last couple of points I have, you know, I'm a product guy, so I've always been shipping things. Can how can you lighten the load of your products?

Right.

If you're shipping, are you maximizing your discounts for your carriers?

Right.

I mean, you know, we used to get 60, 70% off of our UPS rates because we ship so much. But you have to remind them all the time and keep revisiting those things. Right. Can you make your shipments lighter? One of the things I've noticed, I buy a ton of stuff from Amazon for one of our businesses and things are all coming in bags now instead of boxes, right? Yeah, little brown bags instead of little brown boxes. I mean, can you put things in. In bags or, or will carry. Will your carriers provide you with free packaging? You know, UPS, FedEx and UPS do. So you need to be using that resource. You know, a buck a box can really add up when you're shipping thousands of products. Right. Thousands of orders.

Yeah. Makes sense.

And then.

Yeah, yeah.

And then last couple comments on, on kind of related to our banking topic that we started the show with. Look at your cash register reserves. I mean, I think things are going to get better.

Right.

But we don't know how long is this going to last? What's going to happen over the winter with COVID Right. Are things going to slow down again? Who knows?

Who knows?

What does your cash look like? Be sure you have lines of credit in place if you don't need it. Just like we said at the beginning of the show, now's the time to get it. Think about that. You may need to bridge some of those short term cash flow issues. You can still apply for the etl, the Economic Injury Disaster loan.

Really? I didn't even realize that was still. I mean, I knew it was through.

The end of the year. And they've increased the cap to $2 million for small business owners. One of the absolute easiest loans to get. And it's a 30 year loan at a very low interest rate. Much easier to get than a traditional loan. And really if you can show a significant drop in revenue over one of the quarters. I don't know exactly. I think you have to show it for at least one quarter.

One quarter that's right.

One quarter. That is a great way to access that capital. Even if you just pay it back a year from now or six months from now if you don't need it. It's a great way to do it.

Yeah, well, it's a nice safety net. Like you said, we don't know what's going to happen this winter. So if your business was negatively affected by the initial lockdown, well, you might. If you haven't changed things and another lockdown happens, you might need that extra capital.

Yeah, well, get the Eidl loan, put it in your bank account, then start talking to your banker, say, hey, I want to. I got this Eidl loan. But wouldn't you guys like to have that business? Because then you can get a line of credit, which is only charging you interest when you tap it, versus the loan, which is a term loan, which you're paying interest on all the time, the whole time. Yeah, you can leverage that Eidl loan loan to get yourself into an equivalent line of credit and an additional line of credit with your bank because they want your business. And if you're paying 3% to the, you know, via the SBA, you, you know, get it through your normal banker.

I like it. I like it.

That's my thoughts on inflation. I would love to Hear your thoughts. Feedbackusinessshow co. Or you can go to facebook.com. is it businessshowco?

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Yeah, yeah, go there. Comment on our, on our Facebook page or the small business support group. Take part in the conversation and help us all learn some more. That's why we're here.

That's why. That's why we do what we do. Absolutely. Yeah. Make sure to go check out that David versus Goliath podcast now that you're finished with this one. And go check out shopify.com SBS because that's where you're gonna. That's the engine you want to use. Trust us. Trust us. Hopefully you already do trust us. Thanks for listening, folks. Keep living that charmed life. We'll see you next time.